Financial Performance - Total revenue for 2024 fiscal year reached RMB 7,072.56 million, a significant increase from RMB 4,509.85 million in 2023[3] - Net profit attributable to the company's owners for 2024 fiscal year was RMB 1,719.50 million, compared to RMB 971.29 million in 2023[3] - Adjusted EBITDA for 2024 fiscal year was RMB 904.59 million, down from RMB 1,207.45 million in 2023[3] - Gross profit for 2024 fiscal year was RMB 2,119.01 million, up from RMB 1,954.77 million in 2023[4] - Adjusted net profit for 2024 fiscal year was RMB 2,180.71 million, up from RMB 1,089.33 million in 2023[4] - Basic earnings per share for 2024 fiscal year was RMB 1.68, compared to RMB 0.97 in 2023[3] - The company recorded a post-tax gain of RMB 1.3 billion from the sale of its education business in 2024[7] - Total net revenue increased by 56.8% from RMB 4.5 billion in FY2023 to RMB 7.1 billion in FY2024[13] - Net revenue from self-operated products and live-streaming e-commerce grew by 68.1% from RMB 3.9 billion in FY2023 to RMB 6.5 billion in FY2024[13] - Adjusted net profit for continuing operations was RMB 709.4 million in FY2024, compared to RMB 916.1 million in FY2023[13] - Adjusted profit for the year was RMB 709.4 million, compared to RMB 916.1 million in the previous year[46] - Adjusted EBITDA for the year was RMB 773.8 million, compared to RMB 1,080.8 million in the previous year[47] - Net profit from continuing operations decreased from RMB 799.2 million in FY2023 to RMB 249.1 million in FY2024[44] - The self-operated products and live e-commerce segment's gross margin decreased from 38.2% in FY2023 to 25.9% in FY2024 due to promotional activities and a shift towards lower-margin agricultural products[33][34] - Gross profit for the self-operated products and live e-commerce segment increased by 14.1% from RMB 1.5 billion in FY2023 to RMB 1.7 billion in FY2024[33][34] - University education segment gross margin improved from 74.6% in FY2023 to 77.5%, driven by strong market demand and reduced low-price entry-level courses[35] - Institutional clients gross margin increased from 79.9% in FY2023 to 89.7%[36] - The company's total revenue for the fiscal year 2024 was RMB 7,072,564 thousand, accounting for 100% of the group's total revenue, compared to RMB 4,509,849 thousand in fiscal year 2023[102] Assets and Liabilities - Total assets increased to RMB 6,541.52 million in 2024 from RMB 3,852.94 million in 2023[6] - The company's equity attributable to owners increased to RMB 4,969.22 million in 2024 from RMB 2,803.81 million in 2023[6] - Current assets increased significantly to RMB 6,163.89 million in 2024 from RMB 3,436.92 million in 2023[6] - Cash and cash equivalents increased to RMB 2.26 billion at the end of the fiscal year, up from RMB 1.17 billion in the previous year[50] - Total monetary funds, including cash, cash equivalents, and financial assets at fair value, amounted to RMB 4.6 billion at the end of the fiscal year[49] - The company's asset-liability ratio decreased to 24.0% from 27.2% in the previous year[49] - The company has no bank loans or other borrowings and maintains sufficient cash and capital resources to fund operations and expansion, with no plans for borrowing in the next 12 months[61] - As of May 31, 2024, the company has no significant contingent liabilities[63] - The company has no mortgaged assets as of May 31, 2024[62] - No major litigation or arbitration cases were reported during the period, and the company is not aware of any pending or threatened significant legal claims as of May 31, 2024[65] - The company has no distributable reserves as of the end of FY2024[66] Operational Highlights - GMV increased from RMB 10.0 billion in FY2023 to RMB 14.3 billion in FY2024, representing a 43% growth[11] - The number of followers on Douyin grew from 41.8 million in FY2023 to 65.0 million in FY2024, a 55.5% increase[11] - Paid orders on Douyin rose from 136.3 million in FY2023 to 181.1 million in FY2024, a 32.9% growth[11] - The company developed and launched 488 SKUs of self-operated products in two years, expanding from 120 SKUs in FY2023[16] - Self-operated products accounted for approximately 40% of total GMV in FY2024, up from 30% in FY2023[16] - The company's app became a core channel for self-operated products, with some products generating over 40% of their total GMV on the app[15] - The company implemented a multi-platform strategy, with the "Dongfang Zhenxuan Self-operated Products" Douyin account consistently achieving monthly GMV exceeding RMB 100 million[14] - The company's GMV increased by 43% to RMB 14.3 billion in the 2024 fiscal year, with 8.4% of GMV coming from the app[19] - The company has achieved 99% coverage for domestic ambient delivery and 97% coverage for cold chain delivery[18] - The company has established 27 front-end delivery warehouses in Beijing, covering 92% of the area within the Fifth Ring Road, with a member coverage rate of 73.5% and an average delivery time of 44 minutes[18] - The company's self-operated products and live e-commerce team reached 1,883 people, including 1,318 full-time and 565 part-time employees[18] - The company's supply chain and product team reached 830 people, including 565 full-time and 265 part-time employees[18] - The company plans to expand offline self-operated product promotion in the 2025 fiscal year, starting with a pilot in Beijing in the second half of 2024[24] - The company has invested in a sausage factory and strengthened upstream supply chain management to optimize raw material costs[17] - The company has partnered with logistics companies such as SF Express and JD Logistics, achieving a user satisfaction rate of 96.3% for instant orders in Beijing[18] - The company has sold its education business to focus on self-operated and live e-commerce operations, which have become the main revenue source[20] - The company emphasizes product quality control, including traceability of meat products and pesticide residue testing for vegetable products[23] Expenses and Investments - Sales and marketing expenses surged by 174.5% from RMB 315.5 million in FY2023 to RMB 866.1 million in FY2024, primarily due to increased employee costs in the self-operated products and live e-commerce business[38] - R&D expenses doubled, increasing by 101.6% from RMB 65.3 million in FY2023 to RMB 131.6 million in FY2024[39] - Capital expenditures for property and equipment were RMB 35.9 million, up from RMB 12.8 million in the previous year[54] - The company raised approximately HKD 1.783 billion in net proceeds from the 2020 subscription, with HKD 149.9 million utilized in FY2024[87] - The remaining balance of the 2020 subscription proceeds as of FY2024 is HKD 527.9 million, with HKD 250.4 million allocated for sales and marketing, HKD 3.9 million for technical infrastructure, HKD 105.6 million for teachers and other business-related personnel, and HKD 168.0 million for working capital[87] Shareholder and Equity Information - The company did not repurchase any shares on the Hong Kong Stock Exchange during fiscal year 2024, despite having authorization to repurchase up to 10% of its issued shares[90] - No final dividend was recommended for fiscal year 2024, consistent with the previous fiscal year[94] - The company did not issue any debentures during fiscal year 2024[92] - No stock-linked agreements were entered into or existed during fiscal year 2024, except as disclosed in the annual report[93] - The company did not hold any treasury shares at the end of fiscal year 2024[91] - The company's integrated affiliated entities generated total revenue of RMB 7,072,564 thousand, representing 100% of the group's total revenue for the reporting period[102] - The company's contract arrangements with Beijing Xuncheng and its subsidiaries remained unchanged during fiscal year 2024, with no significant changes or terminations[103] - The company's directors and senior management did not receive any discretionary bonuses during fiscal year 2024[95] - The company's contract arrangements with Beijing Xuncheng and its subsidiaries provided the company with control over the economic benefits generated by these entities[104] - Exclusive option agreement signed on May 10, 2018, allowing Dexin Dongfang to acquire Beijing Xuncheng's equity at the minimum permissible cost under Chinese law[108] - Equity pledge agreement signed on May 10, 2018, ensuring previous registered shareholders pledge their equity in Beijing Xuncheng to Dexin Dongfang[109] - Irrevocable power of attorney signed on May 10, 2018, authorizing Dexin Dongfang to appoint directors and vote on behalf of previous registered shareholders[110] - Supplementary agreement signed on October 10, 2019, making Zhuhai Chongsheng a party to the contractual arrangements with Beijing Xuncheng[111] - Second supplementary agreement signed on February 1, 2021, involving Xi'an Ruiying, Hainan Haiyue, and Wuhan Dongfang as parties to the contractual arrangements[112] - Third supplementary agreement signed on May 24, 2023, terminating rights and obligations of Linzhi Tencent and Tianjin Limited Partnership in Beijing Xuncheng[113] - Fourth supplementary agreement signed on March 7, 2024, terminating rights and obligations of Kuxue Huisi, Xi'an Ruiying, and Wuhan Dongfang in Beijing Xuncheng[114] - Contractual arrangements established to navigate foreign investment restrictions in China, particularly in online and mobile platforms and live e-commerce businesses[115] - Risks associated with contractual arrangements include potential non-compliance with Chinese laws, changes in foreign investment laws, and reliance on contractual control over operational control[117] - The 2023 New Oriental Framework Agreement involves transactions including advertising, marketing, and promotion services, with an annual cap of RMB 52.42 million and actual transaction amount of RMB 27.68 million[122] - The company's procurement of goods from New Oriental Group has an annual cap of RMB 26.82 million and actual transaction amount of RMB 3.25 million[122] - The company's provision of goods to New Oriental Group has an annual cap of RMB 47.57 million and actual transaction amount of RMB 37.24 million[122] - The company's transfer of TPO exam materials license to New Oriental Group has an annual cap of RMB 4.59 million and actual transaction amount of RMB 4.16 million[122] - The company's receipt of online or offline educational resources from New Oriental Group has an annual cap of RMB 10.50 million and actual transaction amount of RMB 0.02 million[122] - The company's provision of online or offline educational resources to New Oriental Group has an annual cap of RMB 2.54 million and actual transaction amount of RMB 0.00 million[122] - The 2023 Tigerstep Framework Agreement involves property leasing and property management services, with an annual cap of RMB 1.00 million and actual transaction amount of RMB 0.17 million[123] - The company has implemented internal control measures to ensure related party transactions are conducted under normal commercial terms and are not inferior to terms available to third parties[124] - The company's independent non-executive directors confirmed that the transactions conducted in FY2024 were in accordance with the relevant provisions of the continuing connected transactions agreements[126] - The company's independent external auditors confirmed that there were no instances where the disclosed continuing connected transactions exceeded the annual caps set by the company[128] - The company announced that Dong Yuhui resigned and will no longer be employed by the group, with a distribution of approximately RMB 129 million from the undistributed profits of the target company to Dong Yuhui[132] - Beijing Xuncheng transferred 100% equity of the target company to Dong Yuhui for a consideration of RMB 76.585 million, and the target company is no longer a consolidated subsidiary of the group[133] - The company will suspend the registration of share transfers from October 29, 2024, to November 1, 2024, to determine the shareholders eligible to attend the annual general meeting[136] - Mr. Yu holds 24,195,285 shares, representing 2.35% of the company's total issued shares[139] - Tigerstep, wholly owned by Mr. Yu, holds 28,682,832 shares, representing 2.78% of the company's total issued shares[139] - Ms. Sun holds 30,000 shares, representing 0.00% of the company's total issued shares[139] - First Bravo, wholly owned by Ms. Sun, holds 151,000 shares, representing 0.01% of the company's total issued shares[139] - Mr. Yin holds 4,700,000 shares, representing 0.46% of the company's total issued shares[139] - Mr. Yu holds 199,072,160 shares in New Oriental, representing 11.6% of New Oriental's total issued shares[143] - New Oriental holds 589,585,500 shares in the company, representing 57.17% of the company's total issued shares[147] - The company has issued 30,000 new shares under the 2023 plan, representing approximately 0.00% of the company's weighted average issued share capital[148] - As of May 31, 2024, 25,940,885 shares remain exercisable under the Pre-IPO Plan, representing approximately 2.52% of the company's total issued share capital[151] - The exercise price for the pre-IPO share option plan is HK1.13 per share before listing)[154] - The pre-IPO share option plan has a remaining term of approximately 7 months, expiring on March 27, 2025[155] - As of May 31, 2024, a total of 34,483,946 share options under the 2019 plan remain unexercised, representing approximately 3.32% of the total issued share capital[162] - During the reporting period, 3,942,676 share options under the 2019 plan were exercised, 1,519,999 were canceled, and 516,189 expired[162] - The maximum number of shares that may be issued under the 2019 plan and other plans cannot exceed 10% of the total issued shares at the listing date (91,395,910 shares)[162] - Each eligible participant under the 2019 plan can only be granted share options equivalent to 1% of the company's total issued share capital within any 12-month period[163] - The 2019 plan was terminated on March 9, 2023, and no further share options will be granted under this plan[165] - The weighted average closing price of shares immediately before the exercise date in FY2024 was HK$27.04[167] - The exercise price for share options granted under the 2019 plan is determined by the board and cannot be lower than the highest of: closing price on grant date, average closing price of the 5 preceding business days, or the nominal value per share[166] - The total number of share options granted under the 2019 plan as of June 1, 2023, was 40,462,810, with 27,962,810 remaining unexercised at that time[167] - The total number of shares authorized for issuance under the 2023 Plan is 101,351,871 shares, representing 10% of the issued shares as of the adoption date of the plan[173] - As of June 1, 2023, 70,976,871 shares were available for granting under the 2023 Plan, with 30,000 shares granted during the reporting period[174] - The maximum number of shares that can be issued to service provider participants under the 2023 Plan is 2,027,037 shares, representing 2% of the total plan authorization[173] - As of May 31, 2024, 89,053,201 shares remain available for issuance under the plan authorization, representing 8.63% of the total issued share capital as of the latest practicable date[173] - The 2023 Plan has a validity period of 10 years, from March 9, 2023, to March 8, 2033, with approximately 9 years remaining[180] - The exercise price of stock options cannot be lower than the higher of: (i) the closing price on the grant date, or (ii) the average closing price over the five business days preceding the grant date[177] - The vesting period for awards under the 2023 Plan must be at least 12 months from the grant date, except in limited circumstances[179] - As of the end of the reporting period, 1,005,000 shares were unvested, 495,000 shares were vested, and 399,000 shares were forfeited[180] - The fair value of the awarded shares during the reporting period was HKD 30.25 per share[180] - The total number of shares available for granting under the 2023 Plan as of May 31, 2024, is 71,406,871 shares[174] - The fair value of the awarded shares during the period is determined based on the fair value of the company's ordinary shares on the grant date[182] - The total vesting period for the awarded shares is three years, with 20% to 50% vesting on each anniversary of the grant
东方甄选(01797) - 2024 - 年度财报